Maija Palmer, innovation editor of startup-focused publication Sifted moderated a discussion panel, featuring Vaysh Kewada, founder and CEO of chipmaker Salience Labs, Jacob Bryce, founder of Israel Venture Partner and venture scout in Israel for industrial automation producer ABB and chemical company Henkel, and Ezra Carlson, principal director of Business Innovation Consulting.
Participants in the discussion tried to give a definition of “deep tech”. According to Bryce: “People define it differently. It depends on what industry you come from. It could be anything from a tech-enabled application or selling software as a service through using software learning (such as artificial intelligence and machine learning) to science-based innovation in hardware.”
To Carlson, the term has some distinct characteristics: “I see it as category of emerging technology, e.g. AI, quantum computing. The aspect of emergence is very important. It is highly disruptive kind of technology that has socio-economic objectives and has long gestation periods. There are R&D risk and product market fit risks.” To Kewada, who is herself part of a team of a deep tech company: “Generally a deep tech business is looking to quite violently disrupt the market.”
Bryce spoke on some of the problems around corporate investors shying away from backing deep tech startups: “It depends on the corporates. Some that are more science and R&D heavy do invest in them. We normally have to find application and business case often. In the corporate world, you can deliver value but it takes some extra time to get there.” He also added: “It is sometimes hard to find the partner in the corporation to sign. It has to be adjacent enough to make them take the technology seriously.”
Carlson, in turn, identified several major challenges around the evaluation of the technology and how it is done, short term orientation and concurred on the importance of business alignment or how close the technology is to the core business.
One of the major questions tackled in the discussion revolved around how corporates can help deep tech startups and what more is needed. Kewada shared her position: “CVCs are in a unique position to be able to do due diligence on deep tech companies. They are able to understand them earlier than financial VCs can.”
However, she also explained: “It is always going to be more complicated for startup to take corporate money. There is always going to be trepidation from the startups. Transparency and trust around long term incentives matter. That can go along for easing a startup’s concerns.”